A recent Law 360 story by Andrew Karpan, “Sales Rep Score $1.6M in Fees After Beating RICO Case”, reports that a federal judge in Los Angeles has ordered a biotech startup to pay more than $1.6 million in legal fees to two former employees, after the company failed to convince a jury that the pair broke racketeering laws when they worked for a rival that stole proprietary information when setting up shop.

While Bryan Banman and his companies, CTM Biomedical and CTM Medical Inc., were hit with a $62 million judgment last year for breaching his fiduciary duties to a company he used to run sales at called Skye Orthobiologics as well as a company Skye helps run called Human Regenerative Technologies, jurors rejected Skye's claims that Banman's companies and people they worked with somehow broke the Racketeer Influenced and Corrupt Organizations Act.

This gave Mike Stumpe and Nathan Boulais, the two sales representatives who worked for both Skye and later CTM, an avenue to ask U.S. District Judge Maame Ewusi-Mensah Frimpong to award them legal fees for having to litigate the case.

In her ruling, she did just that.  "The court agrees that this is an appropriate finding given that the litigation against Stumpe has concluded in dismissal of plaintiffs' claims against Stumpe by a jury, which has created a 'material alteration of the legal relationship' between the parties here," she wrote.  "As with Stumpe, plaintiffs similarly did not prove any of their claims against Boulais, making him the prevailing party," she added.

The judge also left the fee bids unchanged from what their lawyers had requested.  "The court further finds the hours expended ... reasonable to defend a litigation spanning over three years," she concluded about both cases, which involved 1,630 hours of billing from Stumpe's lawyers and 1,383.2 from Boulais'.  This came to a total of a hair over $1 million to Stumpe's team at Blank Rome LLP and a hair under $640,000 to Boulais' lawyers from Bienert Katzman Littrell Williams LLP.

According to the order, Bienert Katzman charged at a rate of "$405–$760 for attorneys and $100–$290 for other staff," while Blank Rome billed "$400–$725 for attorneys, $275 for a paralegal, and $225–$414 for other staff."